A steady drop in rates is giving homeowners a second chance to lower mortgage payments, and according to Ellie Mae, lenders in January saw their share of refinancing activity jump.
Lenders in January saw their share of refinancing activity jump eight percentage points to include 51% of all loan volume, the highest level in more than a year and a half, according to the latest Origination Insight Report released by Ellie Mae. Meanwhile, the closing rate for all loans rose for the fourth consecutive month to 62.4%, the highest level since Ellie Mae began tracking origination data in 2011.
According to the January Origination Insight Report, the average interest rate for a 30-year fixed rate mortgage fell from 4.251% to 4.154%, more than one half of a percent lower than the January 2014 rate of 4.723%. Rates are at their lowest level since July 2013, according to Ellie Mae’s data.
“Homeowners who missed refinancing over the past year because they did not have enough equity in their homes are getting a second chance in 2015,” said Jonathan Corr, president and CEO of Ellie Mae. “Lower rates and the decision by the FHA to lower the mortgage insurance premium (MIP) are also good news for the purchase market.”
Other findings of the report include:
MONTHLY ORIGINATION OVERVIEW FOR JANUARY 2015
PROFILES OF CLOSED AND DENIED LOANS FOR JANUARY 2015
According to the January Origination Insight Report, the average interest rate for a 30-year fixed rate mortgage fell from 4.251% to 4.154%, more than one half of a percent lower than the January 2014 rate of 4.723%. Rates are at their lowest level since July 2013, according to Ellie Mae’s data.
“Homeowners who missed refinancing over the past year because they did not have enough equity in their homes are getting a second chance in 2015,” said Jonathan Corr, president and CEO of Ellie Mae. “Lower rates and the decision by the FHA to lower the mortgage insurance premium (MIP) are also good news for the purchase market.”
Other findings of the report include:
- Despite the jump in refinance share, the average closing time for refinances fell from 42 days to 39 days.
- The percentage of closed loans with an average FICO score below 700 dropped from 32% in January 2014 to 30% last month.
- The average FICO score on closed VA purchase loans and refinances climbed to 704 and 716.
MONTHLY ORIGINATION OVERVIEW FOR JANUARY 2015
| January 2015* | December 2014* | 6 Months Ago (July 2014*) |
1 Year Ago (Jan. 2014*) |
|
| Closed Loans | ||||
| Purpose | ||||
| Refinance | 51% | 43% | 32% | 47% |
| Purchase | 48% | 56% | 67% | 53% |
| Type | ||||
| FHA | 15% | 17% | 20% | 21% |
| Conventional | 70% | 67% | 64% | 67% |
| VA | 11% | 11% | 11% | - |
| Days to Close | ||||
| All | 40 | 41 | 37 | 45 |
| Refinance | 39 | 42 | 37 | 44 |
| Purchase | 40 | 41 | 38 | 47 |
| ARMs vs. Fixed / Length / Rate | ||||
| ARM % | 5.1% | 5.8% | 6.5% | 7.2% |
| 15 Year % | 10.8% | 9.9% | 8.9% | 15.0% |
| 30-Year Note Rate |
4.154% | 4.251% | 4.388% | 4.723% |
PROFILES OF CLOSED AND DENIED LOANS FOR JANUARY 2015
| Closed First-Lien Loans (All Types) |
Denied Loans (All Types) |
|
| FICO Score (FICO) | 731 | 681 |
| Loan-to-Value (LTV) | 79 | 80 |
| Debt-to-Income (DTI) | 24/37 | 28/46 |
